Joanna is trying to decide between getting a credit card and getting a line
of credit, and she has asked you to help her make a list of pros and cons.
What are some pros and cons for each type of credit service? (1 point)
Lines of credit can be used at the point of sale, while credit cards
cannot. Credit cards typically have a lower interest rate while lines of
credit typically have higher interest rates.
Credit cards can be used at the point of sale, while lines of credit cannot.
○ Lines of credit typically have a lower interest rate while credit cards
typically have higher interest rates.
Lines of credit can be used at the point of sale, while credit cards
cannot. Lines of credit typically have a lower interest rate while credit
cards typically have higher interest rates.
Credit cards can be used at the point of sale, while lines of credit
cannot. Credit cards typically have a lower interest rate while lines of
credit typically have higher interest rates.
Some pros and cons for credit cards:
Pros:
- Can be used at the point of sale for purchases
- Typically have rewards programs and cash back offers
- Offer consumer protection and fraud liability coverage
- Can help build credit history if used responsibly
Cons:
- Can lead to overspending and debt if not managed properly
- Often have higher interest rates compared to other forms of credit
- May have annual fees and other charges
- Temptation to make impulse purchases
Some pros and cons for lines of credit:
Pros:
- Can be used for a variety of purposes, including emergencies or large expenses
- Typically have lower interest rates compared to credit cards
- Flexible repayment options, such as making interest-only payments
Cons:
- Often require collateral, such as a home or car
- May have fees and charges for accessing the line of credit
- Can be harder to qualify for compared to credit cards
- Can lead to overspending and debt if not managed responsibly.